Patience may be a virtue, but for many traders here lies the toughest task: we do not all naturally possess patience. But we do have to exercise patience to become successful. Trading is quite simply ‘a waiting game’ and big traders are patient traders. The famous Australian price-action trader Nial Fuller even calls it his ‘secret weapon’. So let’s take a look at what patience can bring you and how you can achieve it.
An unknown writer once wrote: “5 per cent of the problems in our life can be attributed to circumstances we have no influence over. The remaining 95 per cent is caused by ourselves, often through our own impatience”. Wait a minute, those numbers are familiar: Wasn’t it about 95% of traders and investors who blow up their portfolio within the first year?! This can’t be a coincidence. It isn’t. Patience is part of your mindset.
The ability to wait for a long time without getting angry.
Impatience is often caused by anger because things aren’t going as you had planned. This includes patience: the ability to wait for a long time without getting angry. This is easier to achieve if you keep your expectations realistic. The anger of traders and investors is often aimed at the financial markets, but they just so happen to fall under the 5 per cent of events you have no influence over. The markets go their own way and are unpredictable. This opposes what beginning traders and investors expect of the markets. And when (repeatedly) things don’t go their way impatience strikes. These traders let their emotions run and do things they agreed not to do (if they even have those agreements). Some want to be rich by next year, others have had a lucky break of two and want more, fast. It becomes even more serious when you start trading with money you can’t afford to lose. By then patience is an almost impossible task. Even more advanced traders can easily fall prey to impatience. After the ‘sweet taste of success’ a drawdown is often hard to take and again it comes down to patience. It is the same if you barely miss your profit targets; Or are faced with a sequence of stoplosses.
This is how you turn impatience into an opportunity
Impatience also provides opportunities. Because patience is part of the 95 per cent you do have influence over. This is where the opportunity lies to improve your results. The only question remains how you turn impatience into opportunity. A few suggestions:
- Confront yourself when it is happening.
- Acknowledge your mistake and decide how you want to behave the next time.
- Fear the consequences (Impatience can cost you your edge in the market).
- Analyse exactly when you lose your patience.
- Share your impatience with your wingman/wingwoman (and allow yourself to be addressed to it when it goes wrong).
- Exercise patience in your daily life
Do you want to be a patient trader yielding consistent profits? Then think about ways to exercise patience. Start with suppressing impatience in your daily life and extend this attitude towards trading. Remember that anything can happen and that you decide whether or not you can profit from the unexpected. Realise that you are the difference between profit and loss. Accept that you can only win if you are also able to accept losses. Keep in mind that the big traders are patient traders. If there is the threat of losing your temper, make sure you get angry at yourself. Rid yourself of the trader who keeps losing his patience, the patience needed to become successful. Use your influence to stop yourself from becoming part of the 95 per cent who don’t make it. 95 per cent of the time you hold the key. That should become a reassuring thought.
From: The Power of Mindset Trading
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